The role of technology in music has always been to take the artist’s work to a larger audience. Each technological advancement helped artists to reach a larger audience.
To give you some numbers, we as music consumers are listening to more music than ever before — on our commute, at the gym, while we work, in bars and restaurants. We
use our earbuds, our phones, our Bluetooth speakers, our smart-watched wrists… music now occupies a larger place in our everyday lives than ever. A person in the US listened to an average of 32.1 hours of music per week in 2017, which is nearly eight hours more per week than just two years ago.
However, this technology which helped artists to spread their music is also threatening them. Artists no longer have control over their music due to technological improvements like streaming services and peer-to-peer sharing websites. Artists have to cope with a bunch of problems:
- Illegal downloads and streaming
- People don’t pay for music
- Record labels take all the profits
The global recorded music industry brought in $17.3 billion in revenues in 2017 alone. Sadly, record labels funnel most of this revenue away from artists towards themselves. It’s rather ironic that the people creating the most value in the system are usually the ones receiving the least.
People creating the most value in the system are usually the ones receiving the least. — Ryan Smith
Artists usually don’t make for good business people. After all, they would prefer to focus on their craft. It is one of the reasons that this industry has some of the most deeply entrenched middlemen in the world of business.
Artists find it difficult to live from only music, to give you an example, an artist needs an estimated 334,545 streams on Spotify to earn a national minimum wage of $1,472. For Youtube, this number is even worse with 2,102,857 Youtube plays.
Liam Gallagher agrees with the current income problem for artists, there once was a time when a hit record meant a wealth of riches for all parties involved in its creation, or at the very least, a decent living. This is increasingly not the case as habits of music consumption drift ever further towards fully digital all-you-can-eat experiences that leave working artists finding it difficult to make ends meet.
The world we live in today, we no longer own music. Instead, we stream music from on-demand services that allow us to access music whenever we feel the need. Artists might finally have access to the largest possible audience on the planet.
We no longer own music, technology does.
Despite years of technological progress, society still hasn’t created a concrete way to manage artists ownership rights in a fair and transparent way. Rights remain largely in control of the record labels who have enormous legal resources. In 2015 legendary musician Prince warned young artists of the dangers of record contracts, citing them as a type of modern-day slavery.
But introducing blockchain into the music industry could change all of that. Let’s take a look at the current blockchain projects tackling the current music industry issues.
Ujo — Distributed Music Storage System
Ujo holds an encrypted decentralized database with music rights on Ethereum. The platform utilizes Ethereum to build out flexible and modular licensing systems using smart contracts. It enables automated payments to rights holders according to licenses they design themselves.
This can be extended to incorporate a wide range of additional functionality such as programmatic contracts, variable pricing, or payment routing. Once you’ve sent a payment to the smart contract, it will return you access codes for downloads in various formats.
eMusic — Decentralized Music Distribution and Royalty Management System
Using a system of simple smart contracts, the eMusic blockchain platform will include everything artists need to publish and distribute music and manage rights and royalties.
Artists simply upload their music, document the rights and choose where fans can stream or buy their music. When a song is played or sold, the revenue gets split between service provider and rights holders, fairly, and with full visibility to plays and payouts.
Smart contracts take care of fair revenue distribution whenever a song is sold.
In addition, eMusic is building a crowdfunding platform to further engage fans and raise money for music projects that would allow artists to create new works — or utilize existing works for which they control the rights — to raise money through an SEC-registered crowdsale, requiring a fee paid with tokens to be able to participate in the purchase of these rights. That way fans would be able to support their favorite artist.
To increase engagement on the platform, users are rewarded tokens whenever they interact with others like creating and sharing playlists or referring new members.
At last, the eMusic token can even be used to trade the rights of music assets, particularly artists’ rights, music scores, and memorabilia, for rights to access other music-related assets available through the eMusic Platform.
eMusic wants to raise $70 million in their token sale to build this product idea. Interesting fact, eMusic is an existing well-known company in the music industry and a champion of independent artists and labels since 1998. For over 20 years, eMusic has helped 47 million fans helping them to discover new music and artists, selling nearly one billion downloads.
Mycelia — Creative Passport
Mycelia Creative Passport is a project pioneered by Imogen Heap. Imogen is no stranger to the cryptocurrency industry. She has been experimenting with blockchain in the music industry since around 2014. Mycelia is a research and development hub for music makers. They aim to ensure that the music industry fully acknowledges and pays for an artists services.
Using emergent blockchain technology, featuring template ‘smart contracts’, the ‘Creative Passport’ will enable quick and easy direct payments, to simplify and democratise collaboration from meaningful commercial partnerships to creativity.”
Other Relevant Projects
- Bitsong — Blockchain music streaming.
- Choon — Blockchain streaming that promises artists to help them keep 80% of their revenue.
- SingularDTV — Content portal to monetize your work online, peer-to-peer distribution, rights management.
Risks of Tokenized Music
First of all, as you can see, many projects try to tackle music industry related problems with blockchain technology. However, platform adoption is as well a crucial element; designing an easy to understand interface for using cryptocurrency for non-crypto people is equally important. Platforms like eMusic are one step ahead as they already have a large existing client base.
On the other side, we can’t buy bread yet using our cryptocurrency. The question is if artists feel comfortable using Ethereum tokens and it’s daily price fluctuations. There is a real risk of artists dumping their tokens as they get them. This kind of downward pressure on prices could ultimately cause artists to want to get paid in something that actually holds its value and can be exchanged easily, like Bitcoin or Ethereum.
In addition, don’t think that record labels are just going to sit around and watch as blockchain moves in on the industry. Large record labels have the time, money and resources to launch their own projects or possibly even undermine others.